Dramatic volcanoes, black sand beaches and breezy tropical resorts have long made Hawaii’s Oahu Island a popular vacation spot and second-home destination. The island offers a range of lifestyle properties from ocean view villas to prestigious gated communities and now an emerging urban core in Honolulu is making the capital city more attractive to local and foreign buyers.In response to population growth and demand from wealthy tourists, developers are refreshing Honolulu’s ageing core with new condominium towers, shopping malls and hotels in the city’s biggest building boom in at least a decade. “There’s a lot happening in Honolulu right now,” says Nick Vanderboom, senior vice president of sales at
In response to population growth and demand from wealthy tourists, developers are refreshing Honolulu’s ageing core with new condominium towers, shopping malls and hotels in the city’s biggest building boom in at least a decade. “There’s a lot happening in Honolulu right now,” says Nick Vanderboom, senior vice president of sales at Howard Hughes Corporation. “Facilities are being upgraded for tourists and we have the opportunity to create something for people who live here year-round.” His company has already started construction at Ward Village, a 60-acre master planned community located between downtown Honolulu and Waikiki. While Waikiki Beach caters primarily to tourists, Vanderboom says the new developments in Honolulu will create a central, sophisticated urban fabric to compliment the island’s breezy seaside lifestyle. “We have amazing weather, beaches, but also great urban experiences in terms of shopping and contemporary urban living,” he says. Ward Village will incorporate a range of residential and retail components, and designs from architects Bjarke Ingels Group, Richard Meier and Bohlin Cywinski Jackson.
Market Trends
Condo prices in Honolulu have almost tripled since 2000 to an all time high. Supply is limited. To keep up with population growth, Honolulu needs about 4,000 more homes a year. Permits for all types of new construction reached a record US$2.07 billion in 2014 in Honolulu County, up 11 percent from 2013. The median home value in Honolulu is US$617,600. Honolulu home values have gone up 2.9 percent over the past year and Zillow predicts they will rise 1.5 percent within the next year.
Honolulu’s new condos are proving popular among buyers looking for a seamless lifestyle where they can live, work and play all within a walkable distance, says Patti Nakagawa, Senior Vice President and Previews International Director with Coldwell Banker Pacific Properties in Honolulu. “What draws people to Hawaii is our climate, the crystal-clear ocean, the natural beauty of the islands and the lush green mountains. But the shopping is also really world class here and (Honolulu) is very metropolitan.”
Gateway Towers
Phase one of Ward Village—including two mixed-use residential towers, Waiea and Anaha, broke ground in 2014. The newest phase, Gateway Towers, comprises two glass buildings designed by Richard Meier that house one-, two- and three bedroom residences, penthouses and villas. Residences feature the architect’s signature use of light and glass and include over ten-foot high ceilings with ocean and mountain views, Bulthaup cabinetry, Gaggenau appliances, motorised window shades and custom Meier designed bathtubs. Prices start at US$1.5 million for one-bedroom apartments; two-bedroom units start at approximately US$2 million and three-bedroom units start at US$4 million.Developers are targeting both local and international investors and Vanderboom says so far he has seen significant demand from American, Japanese and Korean buyers. Foreign visitors provide a large boost to the local economy—a record 8.3 million tourists visited Hawaii in 2014—and they also make up a large portion of luxury home sales. While local luxury buyers tend to purchase properties within the US$2 to 2.5 million range, Patti Nakagawa says that over that price point, buyers tend to come from offshore, primarily from the US mainland, Asia, Canada and Australia. Asian buyers are particularly active in the luxury segment. In 2014, some of the highest sales were to buyers from Mainland China, Hong Kong and Singapore. “Last year, we had buyers from Singapore for a US$10 million and a US$15 million dollar sale,” Nakagawa says. Overall in 2014, eight percent of sales over US$5million went to
Developers are targeting both local and international investors and Vanderboom says so far he has seen significant demand from American, Japanese and Korean buyers. Foreign visitors provide a large boost to the local economy—a record 8.3 million tourists visited Hawaii in 2014—and they also make up a large portion of luxury home sales. While local luxury buyers tend to purchase properties within the US$2 to 2.5 million range, Patti Nakagawa says that over that price point, buyers tend to come from offshore, primarily from the US mainland, Asia, Canada and Australia. Asian buyers are particularly active in the luxury segment. In 2014, some of the highest sales were to buyers from Mainland China, Hong Kong and Singapore. “Last year, we had buyers from Singapore for a US$10 million and a US$15 million dollar sale,” Nakagawa says. Overall in 2014, eight percent of sales over US$5million went to buyers from Singapore, four percent to buyers from China and 4.5 percent to buyers from Japan. Boosted by demand from foreign buyers, the market has been performing strongly. In July 2015, overall sales in the luxury market were up by 14 percent compared with the same period in 2014 according to a report from Coldwell Banker Pacific Properties. During the second quarter of 2015, there were a total of 209 closed sales over US$1 million, a 22 percent increase over the same period in 2014, making it the highest level ever recorded in Hawaii real estate history.
Designed by Richard Meier, the Gateway Towers form part of the Ward Village master plan
Single-family homes with ocean views or in gated communities are also in high demand among foreign buyers. These range from US$1 to 2 million to over US$25 million. “We have some amazing oceanfront properties in the south, the east at Diamond Head and Kahala, all the way to the Port Lock Area. The North Shore is famous for its surf spots,” Nakagawa says.
One of Coldwell Banker Pacific Properties listings, managed by independent agent Tracy Allen, includes Lanikai Hillside Estate, a new home designed by architect James McPeak that is positioned above Lanikai Beach with views of the ocean and the Mokulua Islands. The five-bedroom property includes over 7,400sf of living space with an infinity pool, a gym with a sauna, a sun deck with a Jacuzzi, a three car garage and a price tag of US$14.8 million. Lanikai Beach is approximately 30 minutes by car from Honolulu, a manageable distance and another factor that makes Oahu a popular choice for investors. “It’s easy to get around so everything is accessible. It doesn’t take you all day to get from one part of the island to the others,” Nakagawa says. Meanwhile, condo construction continues at the master plan for Ward Village in Honolulu. “There’s a residential plan for every phase, we could build about 20 towers,” Nick Vanderboom says. “Our vision over the next decade is to continue to bring in great architects and really create a community that is on par with Hudson Yards in Manhattan or Battersea Power Station in London.”
Honolulu at a glance
- In the Hawaiian language, the word “Honolulu” can be translated to “sheltered bay” or “place of shelter.”
- Honolulu and the rest of the state of Hawaii has been ranked first in the country for general well being.
- Honolulu has been named the third happiest American city to work in by Forbes magazine
This story was first published in Palace Magazine
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